Industry NewsMortgage

ARMs costlier than fixed-rate mortgages

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Demand for adjustable-rate mortgages has almost disappeared as long-term fixed-rate mortgages continue to be cheaper than ARM loans for the first time in 25 years of recordkeeping by Freddie Mac. The 30-year fixed-rate mortgage (FRM) averaged 4.8 percent with an average 0.7 point for the week ending April 23, down from 4.82 percent last week and 6.03 percent a year ago, Freddie Mac said in releasing the results of its weekly rate survey. One-year Treasury-indexed adjustable-rate mortgages (ARMs) averaged 4.82 percent this week with an average 0.4 point, down from 4.91 percent last week and 5.29 percent a week ago. While long-term rates have been dropping for some time -- reducing much of the advantage ARM loans might have once held for borrowers -- it's perhaps unprecedented for rates on fixed-rate mortgages to be lower than ARM loans. This is the second week in a row that rates on 30-year fixed-rate mortgages were lower than those for 1-year ARMs -- the first time that's...